Owning a home is a dream come true for most people, but it can be a long-drawn process—from finding the right locality and builder to completing the loan paperwork.
It is also important to do your due diligence in advance to avoid the fate of many home buyers who end up facing litigations because of unclear property titles or delayed projects with no signs of completion. One of the ways to do it is checking the paperwork properly.
Here are three sets of documents that you must check before sealing the deal.
For an under-construction project, buyers need to seek the following documents from the developer: title document under which the project is coming up; no-objection certificate (NOC) from any existing lender who has given financial assistance to the developer; basic approvals such as IOD (Intimation of Disapproval), commencement certificate and environment clearance, if applicable.
It is also important to check the RERA Registration Certificate; you will find the details of this certificate on the website of the relevant Real Estate Regulatory Authority (Rera). You must also check sanctioned plans of the flat and occupation certificate, if the building is completed.
Home buyers should also ask for the revenue records of the land on which a project is being constructed. Such records will indicate who is the owner of the land. Certain classes of land may require permission for transfer or may have pending dues. Such issues need to be clarified upfront.
"If the project is mortgaged (including the unit proposed to be brought) with financial institutions, then the home buyer must insist on necessary paperwork from the financial institution to get an unencumbered unit,” says Avikshit Moral, partner, Induslaw, a legal firm.
Once you have made sure everything is in order, don’t forget to check the property documents. The agreement between you and the builder should be approved under the Real Estate (Regulation and Development) Act, 2016. You should also check the project completion date as mentioned on the Rera website. The sample sale agreement should be read in detail to understand the contractual obligations as a home buyer while purchasing the unit. “Home buyers should read it to understand if there are any orders passed in any matter which may impact their ability to buy the unit,” says Moral.
In case of a second sale, "a buyer would have to execute a deed of transfer with the seller. Along with the deed of transfer, parties would need to execute share transfer forms as well to be submitted to the society for transfer of shares," says Harsh Parikh, Partner, Khaitan & Co. Also, check if there are any pending dues to the local authorities and amenities such as electricity and water.
Some experts also advise home buyers to check independently the records of the sub-registrar to see if any undisclosed document/s have been registered in respect of the concerned unit which may impact its title.
“It is advisable to enquire if the property carries any charge on it whether under a bank loan or being a disputed property on account of family and/ or tenancy litigation, outstanding statutory dues,” says Santosh Pandey, associate, Sarthak Advocates & Solicitors.